Negotiation & Supplier Management Flashcards
7 cards from real APP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Negotiation & Supplier Management flashcards as text
A buyer suspects a supplier's quoted price is inflated. Which analytical tool best helps verify cost reasonableness?
Answer: Price / cost analysis
Price analysis compares quoted prices to benchmarks; cost analysis breaks down the supplier's cost elements to verify reasonableness.
Which type of supplier audit focuses specifically on verifying that a supplier's processes consistently produce conforming products?
Answer: Quality management system (QMS) audit
A QMS audit examines whether the supplier's quality processes (e.g., ISO 9001) are effective and consistently applied.
When a negotiator deliberately starts with an extreme opening position to influence the counterpart's perception of a reasonable outcome, this is called:
Answer: Anchoring
Anchoring sets a reference point that biases subsequent discussions, pulling the final agreement toward the anchor.
A long-term supplier contract includes an economic price adjustment (EPA) clause. What is its primary purpose?
Answer: To automatically adjust contract prices based on agreed indices (e.g., PPI, CPI) over time
EPA clauses tie price changes to published economic indices, providing transparency and fairness for both parties when market conditions shift.
Which best describes the difference between a preferred supplier and a strategic supplier in supplier tiering?
Answer: Strategic suppliers have deep integration and joint planning; preferred suppliers meet standards but have less integration
Strategic suppliers are tightly integrated partners often involved in joint planning, while preferred suppliers are qualified and reliable but at a standard relationship level.
A purchasing manager wants to reduce supplier risk without reducing the supply base. Which action is MOST appropriate?
Answer: Implement dual sourcing for critical components
Dual sourcing maintains two qualified suppliers for critical items, reducing disruption risk without eliminating suppliers from the base.
In negotiation, what does BATNA stand for and why is it important?
Answer: Best Alternative To a Negotiated Agreement — it defines your walk-away point and negotiating power
BATNA defines the best outcome available if current negotiations fail; a strong BATNA increases leverage and clarifies when to walk away.